TSX-V: SIR

Investors

President's Letter to Shareholders

July 26, 2016

Dear Fellow Shareholders,

Serengeti’s persistence finally paid off several months back, when we signed a key strategic deal for the Kwanika project with Daewoo Minerals Canada, a subsidiary of Posco Daewoo, a large Korean conglomerate. This is a deal that took nearly two years to bring to fruition and we believe it is a potential game changer for Serengeti. Early on, Daewoo identified the potential to locate higher copper-gold grades within the Central Zone at Kwanika and concurred with Serengeti management that excellent potential also exists to increase resources on the property. Either outcome could positively impact potential project economics.

Daewoo may earn an aggregate 35% interest in Kwanika and some surrounding claims by investing $8.2 million in a staged earn-in over the next three years. Importantly the deal gets Serengeti moving forward again while retaining a majority interest in a potential development stage copper-gold project at a time when the broader market is once again beginning to reasonably value such assets. This is evidenced by the increasingly bullish views on copper expressed recently by a number of hedge funds and copper producers.

The principal business terms of the deal are as follows: Daewoo is committed to fund $1.2 million in expenditures in the first year to earn an initial 5% interest in the Kwanika project (Kwanika, Kwanika East, Smoke, Germansen, Valleau and Rottacker properties) of which $0.8 million will be for project expenditures and $0.4 million paid directly to Serengeti as an operator’s fee. Daewoo may earn an additional 30% interest in the project by funding an additional C$7 million over the subsequent two years for aggregate expenditures of C$8.2 million over three years to earn an aggregate 35% project interest.

Other terms include: Serengeti remaining as project operator, which entitles us to charge a 10% operator’s fee on expenditures beyond the initial $1.2 million investment by Daewoo. Serengeti will retain any eligible METC credits, effectively cash back of 30%, on qualifying expenditures generated by the first $8.2 million expenditure. Serengeti, in addition to maintaining our project interest, would be granted a 1% NSR royalty if our project interest is diluted below 50% and an additional 0.5% NSR royalty if our interest is diluted below 33 1/3 %, subject to partial buyback provisions to Daewoo. Daewoo will have certain concentrate offtake rights from production on the project, subject to Serengeti’s ability to enter into separate streaming arrangements. Finally Daewoo has the right to select and fund exploration on one of Serengeti’s other properties if and when they proceed with the second stage Kwanika earn-in, but such property would be nominated at Serengeti’s sole discretion.

The fully partner-funded program at Kwanika in 2016 includes a 2200m drill program designed to test several high quality targets in and around the Central Zone, which program started in mid July as well as an independent re-evaluation of the previous resource estimate to ensure that we have the best model for copper and gold grade distribution, particularly within the higher grade Central Zone. This study has just been launched at time of writing. Finally later this year, we intend to optimize the prior scoping level PEA study to identify the best mining extraction method and development alternatives to maximize project economics.

We also continue to hold a 100% interest in a number of other high potential copper-gold properties elsewhere in the Quesnel Trough of British Columbia. An equity financing which is underway at date of writing will allow us to renew exploration on a number of these other properties including the Jewel property, a high quality target located not far from Kwanika. All this is happening in a good jurisdiction, with a solid management and the financial backing in place to maximize the Company’s and shareholders’ returns from these assets.

The junior mining markets appear to be awakening from a long slumber and we look forward to an exciting and rewarding year ahead.

As always we welcome your calls and emails, or visit our website at www.serengetiresources.com to track our progress.

Thank you for your continuing interest and support.

Yours truly,

David W. Moore
President & CEO

Cautionary Statement

This document contains “forward-looking statements” within the meaning of applicable Canadian securities regulations. All statements other than statements of historical fact herein, including, without limitation, statements regarding exploration plans and other future plans and objectives, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and future events and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations as well as a comprehensive list of risk factors are disclosed in the Company’s documents filed from time to time via SEDAR with the Canadian regulatory agencies to whose policies we are bound. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and we do not undertake any obligation to update forward-looking statements should conditions or our estimates change, other than as required by law and readers are further advised not to place undue reliance on forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this communication.

© 2017 Serengeti Resources Inc.
All rights reserved.

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